Ratings roundup: BHD, Banco Popular, Banreservas, BNV

- Monday, January 17, 2011

Ratings roundup: BHD, Banco Popular, Banreservas, BNV

Fitch has revised the outlooks to positive from stable on Dominican Republic banks Banco BHD, Banco Popular and state-owned Banreservas as well as upgrading Banco Nacional de la Vivienda y la Produccion's (BNV) national scale ratings.

The actions come after a similar change on the outlook of the country's sovereign rating.

The outlook revision on BHD and Banco Popular's ratings reflects Fitch's expectations that the current and expected improvement in the Dominican Republic's operating environment will help enhance the financial profile of the banks, the agency said in a report.

Start your 15 day free trial now!

cta-arrow

Already a subscriber? Please, login

A diversified retail deposit base, adequate market share, good liquidity, improved asset quality and profitability, sound capital base, competent management, and robust shareholder structure support BHD's ratings. A volatile operating environment remains the main challenge for the bank, while further improvement in its efficiency levels will benefit profitability in times of fierce competition, said Fitch.

To read the full report, in English, go to this link

***

Banco Popular's ratings reflect its strong franchise within the Dominican Republic's financial system, conservative risk culture, adequate asset quality and profitability. The volatility of the operating environment remains the main challenge for the bank, while further improvements to its efficiency levels and capitalization will benefit its ratings, Fitch said.

To read the full report, go to this link

***

The outlook revision on the Dominican Republic's long-term issuer default ratings drove the rating actions on of both Banreservas and BNV as the government is the banks' sole shareholder. Banreservas is the largest bank in the country. Additionally, it is the government's payment agent and plays a key role in the country's economic policy.

Fitch also upgraded BNV's long-term national rating to AA- from A+, the bank's short-term national rating to F1+ from F1 and the national rating for its senior unsecured debt to AA- from A+.

Despite its significantly smaller size, BNV enjoys an explicit government guarantee over the totality of its liabilities and contingencies. The bank also plays an important role in the government's housing program, Fitch said.

To read the full report, go to this link